Chapter 9 (Nature and Classification of Contracts)

Question 1

What is contract law designed to provide?

Answer 1

Stability and predictability in the marketplace

Question 2

What is a Promisor?

Answer 2

a person who makes a promise

Question 3

What is a Promisee?

Answer 3

a person to whom a promise is made

Question 4

What is a contract?

Answer 4

an agreement that can be enforced in court. It is formed by 2 or more parties who agree to perform or to refrain from performing some act now or in the future.

Question 5

What is the Objective theory of contracts?

Answer 5

Party’s intention to form a contract is interpreted by a reasonable person rather than the party’s own subjective intentions.

Question 6

What are the 4 requirements of a contract?

Answer 6

1. Agreement: (offer or acceptance of offer)
2. Consideration: (legally sufficient value; bargained-for exchange.
3. Contractual capacity.
4. Legality

Question 7

What are the Defenses to a contract?

Answer 7

1. Voluntary consent- consent of both parties must be voluntary, (if contract was formed as a result of fraud, mistake, or duress(coercion), the contract may not be enforceable.
2. Form- The contract must be in whatever form the law requires. Some contracts must be in writing to be enforceable.

Question 8

What is a Offeror?

Answer 8

A person making an offer

Question 9

What is a offeree?

Answer 9

Person to whom an offer is made.

Question 10

What are the five types of contracts

Answer 10

1. Bilateral v. Unilateral contracts
2. Express v. Implied
3. Formal and Informal
4. Executed and Executory contracts
5. Valid, Void, Voidable, Unforceable

Question 11

What is a Bilateral contract?

Answer 11

Type of contract that arises when a promise is given in exchange for a return promise. (a promise for a promise)

Question 12

What is a Unilateral Contract?

Answer 12

A contract that results when an offer can only be accepted by the offeree’s performance. (A promise for an act)
Ex. (I promise to pay you 50.00 if you stand on your head for the rest of class.)

Question 13

Revocation of a unilateral contract is good for how long?

Answer 13

normally valid until full performance.

Question 14

Because revocation of a unilateral contract can be harsh what are states doing?

Answer 14

Rule is changing in states so that a unilateral contract offer can be revoked until substantial performance of the act by offeree has occurred.

Question 15

What is a express contract?

Answer 15

a contract in which the terms of the agreement are fully and explicitly stated in words, whether oral or written.

Question 16

What is Implied in fact contract?

Answer 16

a contract formed in whole or part from the conduct of the parties

Question 17

What are the three steps of a implied in fact contract?

Answer 17

1. plaintiff furnished some service or property
2. plaintiff expected to be paid and defendant knew or should have known payment was expected
3. defendant had a chance to reject the services or property and didn’t

Question 18

What is a Quasi contract (implied in law contract)?

Answer 18

These are court imposed contracts. They are fictional contracts created by a court in the interest of fairness and justice.

Question 19

What is a example of a Quasi contract?

Answer 19

Walking/ have a heart attack/pass out/ doctor saves life/ sends bill.

Question 20

When will a Quasi contrant not be found?

Answer 20

If there is a actual contract covering the area or if a party confers a benefit on someone unnecessarily or as a result of negligence.

Question 21

What is a formal contract?

Answer 21

A contract that requires by law a specific form to be valid.

Question 22

What is a informal contract?

Answer 22

A contract that does not require a specified form to be valid.

Question 23

What is a executed contract?

Answer 23

A contract completely performed by both parties.

Question 24

What is a executory contract?

Answer 24

A contract that has not been fully performed.

Question 25

What is a valid contract?

Answer 25

A contract that results when the necessary elements for a contract formation are present.

Question 26

What void contract?

Answer 26

A contract having no legal force or binding effect.

Question 27

What is a voidable contract?

Answer 27

A contract that may be legally avoided or cancelled at the option of one or both parties.

Question 28

What is an example of a voidable contract?

Answer 28

As a general rule, contracts made with minors are voidable at the option of the minor.

Question 29

What is an unenforceable contract?

Answer 29

A valid contract rendered uneforceable by a statue or law. Some contracts must be in writing to be enforceable.

Question 30

What are plain language laws?

Answer 30

General trend by both federal and state governments to push for the use of plain language in contracts.

Question 31

What is the plain meaning rule?

Answer 31

When writing is clear and unequivocal, a court will enforce it according to its plain terms. (What is clearly stated in the contract). No outside evidence will be considered.

Question 32

A court will consider a contract to be ambiguous in what situations?

Answer 32

1. Whe the intent of the parties cannot be determined from its language.
2. When it lacks a provision on a disputed issue.
3. When a term is susceptible to more than on interpretation.
4. When there is uncertainty about a provision.

Question 33

If a contract term is ambiguous, a court may consider what kind of evidence?

Answer 33

Extrinsic evidence (Outside evidence)